BAGHDAD (AP) — Talks between Iran and six world powers snagged Wednesday over dueling proposals concerning Tehran’s nuclear program, a tug-of-war that pits international concerns about the Islamic Republic’s potential to build atomic weapons against enforcing crippling sanctions on its people.

The daylong back-and-forth in Baghdad focused largely on whether the current enrichment level of Iran’s uranium production is a red line the U.S. and other powers will not permit for fear it could become warhead-grade material.

At stake is the threat an Iran armed with nuclear weapons could pose to its neighbors. The U.S. and Israel have indicated readiness to attack Iran if diplomacy and sanctions fail to curb its nuclear program. Both suspect that Iran is aiming to build nuclear weapons, and Israel believes it would be a prime target.

Iran insists its nuclear program is peaceful.

The impasse threatened to dissolve the most hopeful chance of detente in nearly a decade, although both sides agreed to continue negotiations into Thursday.

“The international community hasn’t done something wrong here — we haven’t created a suspicious nuclear weapons program that the world doesn’t know the answers to. Iran has,” a senior U.S. official said early Thursday after the grueling day of discussions that, at times, appeared on the verge of breaking down. “They are the party who has acted to create concerns in the international community.”

However, the official said, the negotiations remain in the beginning of a careful and drawn-out process. “We certainly are not at the end of it,” said the U.S. official who spoke on condition of anonymity to discuss the talks more candidly.

Western negotiators presented a package Wednesday that called on Tehran to place a freeze on its enrichment of uranium to 20 percent, considered a short technical step away from bomb grade. In exchange they offered benefits, including medical isotopes, some nuclear safety cooperation and spare parts for civilian airliners, much needed in Iran.

But they snubbed Iranian calls for an immediate easing of significant economic sanctions imposed on Tehran for flouting U.N. Security Council resolutions that demand the suspension of all enrichment.

Iran brought a potent bargaining chip to the table, tentatively agreeing on the eve of the negotiations to allow U.N. inspectors into a military complex suspected of conducting nuclear arms-related tests.

The gesture was seen as an attempt to head off painful July 1 sanctions on its oil exports to lucrative European markets. U.S. and European measures have targeted Iran’s oil exports — its chief revenue source — and effectively blocked the country from international banking networks.

Diplomats from the six world powers have refused to consider postponing the new harsher sanctions, although the U.S. official said some restrictions could be removed as part of an agreement.

The talks are seen only as a small step forward in a delicate negotiating process that likely will unfold over months. That would likely bring objections from Israel, which claims that Iran is only trying to buy time to keep its nuclear fuel labs in full operation.

But a delay could allow U.S. and European allies to tone down threats of military action — despite calls Wednesday from a hawkish alliance of U.S. senators who urged negotiators to take a hard line against Iran “to leave no doubt that the window for diplomacy is closing.”

“The Iranian regime’s long record of deceit and defiance should make us extremely cautious about its willingness to engage in good-faith diplomacy,” Republican Sens. John McCain and Lindsey Graham, and Independent Joe Lieberman, wrote in Wednesday’s editions of The Wall Street Journal. “The U.S. must be prepared, if necessary, to use military force to stop Iran from getting a nuclear-weapons capability.”

The Baghdad meetings opened with the so-called 5+1 group — the permanent U.N. Security Council members, the United States, Russia, China, Britain and France, plus Germany — putting forward a proposal aimed at putting a cap on Iran’s growing stockpile of uranium enriched to 20 percent. Iran says the uranium is for fuel for medical reactors, but Western diplomats say Tehran already has many times more than it needs, and that moving from 20 percent to bomb-grade purity is a relatively quick and easy process.

The U.S. official said it is too early in the negotiations to discuss whether world powers would agree to let Tehran maintain a lesser percentage of uranium enrichment. “It’s premature to have that discussion,” the official said.

Mike Mann, spokesman for the head of the European Union delegation that is leading the talks, suggested that any rollback in sanctions was unlikely in the Baghdad talks. He called the upcoming sanctions a “matter of the law and they will come into force when they come into force.”

Iran offered a counterproposal that includes “nuclear and non-nuclear issues,” according to the member of its negotiating team. The official would not discuss details of the plan but said it was to be discussed in private meetings with diplomats from the European Union and China, an Iranian ally.

Iran’s top officials, including Supreme Leader Ayatollah Ali Khamenei, have repeatedly said that Iran does not seek nuclear arms and have called such weapons against Islamic principles.

During a visit to western Iran on Wednesday, President Mahmoud Ahmadinejad evoked Khamenei’s belief that “production and use of weapons of mass destruction is forbidden” by Islam.

“There is no room for these weapons in Iran’s defense doctrine,” he said at a gathering to commemorate victims of Iraqi chemical weapons during the 1980-88 war with Saddam Hussein’s Iraq.

Even so, Iran is sticking to its right to enrich uranium as a signatory of U.N. nuclear treaties. The high-enriched uranium is far above the level needed for energy-producing reactors, but is used in medical research. Iran claims its nuclear program is only for electricity and medical applications.

Earlier this week, Tehran tentatively agreed to allow the U.N. International Atomic Energy Agency inspect the Parchin military complex southeast of Tehran. That’s where the U.N. believes Iran ran explosive tests in 2003 needed to set off a nuclear charge. Tehran says Parchin is not a nuclear site.

The Iranian envoys entered the talks sorely wanting to lessen, or at least delay, an EU decision to cut all crude oil imports from Iran that are set to take effect July 1. The 27-nation EU accounts for just 18 percent of Iran’s total oil exports.

Earlier this week, the U.S. Senate backed proposals for further sanctions on Iran, including requiring companies listed on U.S. stock exchanges to disclose any Iran-related business. U.S. and European measures already have targeted Iran’s oil exports — its chief revenue source — and effectively blocked the country from international banking networks.

Oil fell to a seven-month low near $91 a barrel Wednesday on hopes of progress in the talks.

If the July 1 sanctions start as planned, Iran’s Economy Minister Shamseddin Hossein predicted they will backfire, warning this week that Europe should expect a crude oil price of $160 a barrel should the embargo remain in place.

That puts a ticking clock on a negotiations process that, for all its bluffing and brinksmanship, may drag on “for several weeks, if not for several months,” said Bruno Tertrais, senior research fellow at the Foundation for Strategic Research in Paris.

“There will be incentives to not rush toward any kind of deal,” Tertrais said.